the difference between crop yields observed at any given location and the crop’s potential yield at the same location given current agricultural practices and technologies.

The concept is similar to the notion of a "frozen technology" baseline used in Pielke et al. 2008 (PDF) related to energy technologies.

If the world is to increase agricultural production it can do so by (a) expanding production area, and (b) increase productivity per unit area. The increase in production per unit area (b) can be further broken down into (b1) improving productivity using existing technologies and (b2) advancing the productivity frontier. The concept of "yield gap" refers to (b1) or the diffusion of existing technologies, and usefully helps to distinguish potential gains that might, in principle, be attained without technological advances and those that depend upon such advances.

Foley et al. explain:

Much of the world experiences yield gaps (Supplementary Fig. 4a) where productivity may be limited by management. There are significant opportunities to increase yields across many parts of Africa, Latin America and Eastern Europe, where nutrient and water limitations seem to be strongest (Supplementary Fig. 4b). Better deployment of existing crop varieties with improved management should be able to close many yield gaps . . .

Closing yield gaps could substantially increase global food supplies. Our analysis shows that bringing yields to within 95% of their potential for 16 important food and feed crops could add 2.3 billion tonnes (531015 kilocalories) of new production, a 58% increase (Fig. 3). Even if yields for these 16 crops were brought up to only 75% of their potential, global production would increase by 1.1 billion tonnes (2.831015 kilocalories), a 28% increase.

As in other areas of technology in society, agricultural production depends on technologies that should be thought of as integrated technological-social-political systems. Foley et al. explain:

Closing yield gaps require overcoming considerable economic and social challenges, including the distribution of agricultural inputs and seed varieties and improving market infrastructure.

In a comprehensive assessment of the outlook for food production Fisher et al. 2009 (PDF) concluded:

It is common that when world grain prices spike as in 2008, a small fraternity of world food watchers raises the Malthusian specter of a world running out of food. Originally premised on satiating the demon of an exploding population, the demon has evolved to include the livestock revolution, and most recently biofuels. Yet since the 1960s, the global application of science to food production has maintained a strong track record of staying ahead of these demands. Even so, looking to 2050 new demons on the supply side such as water and land scarcity and climate change raise voices that “this time it is different!” But after reviewing what is happening in the breadbaskets of the world and what is in the technology pipeline, we remain cautiously optimistic about the ability of world to feed itself to 2050 . . .

Their cautious optimism was expressed as a function of expectations that appropriate policies are put in place and implemented, including a sustained commitment to agricultural R&D.